Implementing Sustainable Business Strategies

Abstract

Boom and bust patterns are omnipresent in the development of enterprises. An abundance of examples for businesses that grow at first and then collapse can be found. Although evolutionary economists tend to welcome the rising and vanishing of companies and believe in the survival of the fittest (based on competitive market forces), owners and managers of firms have a different concern: they strive for a sustainable business model. However, designing as well as implementing sustainable business strategies is a major challenge. Analysing data from a dynamic decision making experiment, we are able to show that participants struggle with successfully implementing a business growth strategy without either falling into the trap of overshoot and collapse or heavily underperforming in relation to potential success. We relate participants' sub-optimal performance to the way they invest in and manage relevant business resources in a simulation-based experiment.

Assessing the Effects of Climate Change Regulations on the Business Community: A System Dynamic Approach

“…System dynamic thinking assists managers in predicting the consequences of future environmental, social and economic change. Moreover, the well‐defined (positive or negative) feedback loops provide a basis for managers to design essential strategies to strengthen the resilience capacity of their organization (Strohhecker and Größler, ).…”

“…The main goal of this corporate behavior is to avoid new regulatory risks, which have direct consequences on operation and production costs and thus on corporate competitiveness. Lately, some scholars have stressed that the above theoretical approaches have a narrow focus, and they try to contribute to the theoretical discussion by examining proactive sustainability strategies through system thinking and system dynamic approaches (Strohhecker and Größler, ; Abdelkafi and Täuscher, ).…”

Implementing Strategies: The Strohhecker–Groessler Study and the Need for a New Way of Thinking

“…When I read this paper (Strohhecker and Groessler, 2012), I stumbled over the term 'sustainable growth': This is an oxymoron! An oxymoron is a contradiction in terms.…”

Operationalizing Accounting Reporting in System Dynamics Models

“…The instantaneous value of the flow of revenue at the end of the year is not the same as the total revenue earned over the year, yet because it is so easy to create a flow of revenue, most system dynamics models rely on simple flows. Correct accounting reporting structures are a common thread in the work of Sterman's coauthors and students [13][14][15], but it is exceedingly rare to see other modelers use them [16][17][18] even when their express purpose is to represent accounting reports [19,20].…”